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Check Your Dependent Care FSA: Covid-19 Update
Have you found your daycare plans completely changed in the wake of COVID-19? You’re not alone. Many families elected to save money in a Dependent Care Flexible Spending Account during open enrollment in 2019 and never dreamed there would come a time when daycares were closed and camps would be cancelled. (Are you a working parent and not using a Dependent Care FSA? Learn more about this employee benefit here.) Under current law, a married couple filing jointly can save up to $5,000 in a Dependent Care FSA each year (if you are married filing separately you are capped at $2,500). A $5,000 contribution to a Dependent Care Flexible Savings…
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CarMax 2019 Open Enrollment
“It’s the most wonderful time of the year!” No, not Christmas – Open Enrollment! For CarMax employees it’s time to make some big financial decisions. In an attempt to make the selection process easier (and help you make better financial decisions) I’ve created a summary of what you need to know and think about as you navigate CarMax Open Enrollment 2019. For the record, I assume you have at least reviewed the CarMax 2019 Open Enrollment booklet. Let’s dive in. 1. CarMax Group Health Insurance Options First, use the ALEX tool CarMax provides you to get an initial view of what is being offered and what might work best for…
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Is an HSA Right for Me?
Should you take advantage of an HSA? Many people sign up for a high deductible healthcare plan (HDHP) either at work on the exchange but don’t realize that these healthcare plans work best when paired with a healthcare savings account (HSA). An HSA is triple tax-preferred. What the heck does that mean? It means you can save on taxes three ways: You can take a deduction against your income on your taxes or make pre-tax contributions through your payroll provider. Money contributed to an HSA grows tax-free while inside the HSA. Money withdrawn for qualified medical expenses (as defined by the IRS) is tax-free. Want to know more about the…
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Hidden 401(k) Loan Risks to Your Career and Finances
Getting hit with a cash crunch is stressful. What should you do if you need quick access to cash? For many of us who have been working and saving in our 401(k)s, that pot of money can be very tempting. Let’s be honest - 401(k) loans can be relatively cheap and easy to get. They’re kind of like the fast food version of loans. And just like fast food, 401(k) loans can seem like a good idea at first, but they can quickly lead to heartburn. What you really need to know: there are some serious risks involved with tapping a 401(k). There are two major risks you…
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Do you have kids? Do you have an FSA?
Holy cow, medical expenses can eat you alive when you have kids! A lot of people feel nervous about using the flexible spending account that their employer offers. I love flexible spending accounts as a way to save for your ongoing medical expenses with pre-tax dollars. They work really well if you have certain medical expenses you always need - such as contact lenses or a monthly prescription. Or if you have kids who always seem to need random medical care...While these aren't designed as long-term savings vehicles some employers do allow you to roll-over a small amount of money from one plan year to the next. Read your benefit…
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Dependent Care FSAs: The Employee Benefit Parents Shouldn’t Skip
Do you have a kid under 13? Do you pay someone to watch them so you (and your spouse) can work? You may be eligible for a Dependent Care Flexible Spending Account (this is separate from your Healthcare Flexible Spending Account ). Childcare is a huge drain on many families’ budget but few families seem to know about or take advantage of this employee benefit. In this post we will go over the who, what, why, and how of Dependent Care Flexible Spending Accounts so you can make the best decision for your family and possibly save some serious money. What is a Dependent Care Flexible Spending Account? OK, first,…
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The Roth 401(k): 8 Things You Need To Know
The Roth 401(k) is a retirement plan option that is becoming increasingly popular. Yet many people are asking themselves, "should I used a Roth 401(k)?" The answer is: it depends. Let's start with the basics. A Roth 401(k) is similar to the Roth IRA in that it allows you to save after-tax money in a retirement account. Also like the Roth IRA, the money grows tax-free and can be withdrawn tax-free in retirement. This can be an awesome opportunity to allow your retirement money to grow tax-free and then be withdrawn tax-free after age 59 ½. 1. Should I save money in a Roth(k)? There are four big draws for…
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Can An HSA or FSA Save You Money?
Recently a friend asked me if she should participate in her employer’s Healthcare Savings Account (HSA) or Flexible Spending Account (FSA). Signing up for employee benefits can be very confusing. Especially if you are trying to figure out your 401k, HSA, HDHP, FSA and DSA. What the heck does all of that mean? In this post we will explore the Healthcare Savings Account (HSA) and the Flexible Spending Account (FSA). These are two of the most common employer-provided savings accounts for healthcare costs. We will talk about how they can save you money, their unique features, and the risks of each type of account. By the end of this post…
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Is your 401(k) plan good or even decent?
Is your 401(k) plan a good deal or a rip-off? How do you know if you have a good 401(k) plan at work? What should you do if you don’t have a good plan? These are important questions. Not everyone has access to a great retirement plan with low costs, diversified investment options and a generous employer match. We will go through some questions you should ask when reviewing your retirement plan at work, and give you some ideas on what to do if you don’t like your options. Does your 401(k) offer matching employer contributions? One of the most important questions to ask is whether or not your employer…
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Why Investment Fees Matter
Do you have an extra $186,000 lying around? If I told you you could have $186,000 more in your portfolio after 30 years by simply by reducing your investment expenses, would you be interested? I would! When it comes to investing, fees matter. Whether you invest with an advisor, do-it-yourself or invest exclusively in a company retirement plan, the fees you pay to invest your money directly affect how much you end up with over time. You should always be able to easily tell what you are paying to invest your money. This article will explain some of the reasons why mutual fund fees matter to your bottom line. Index…
